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Joshua
Joshua, Lawyer
Category: Property Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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IF THE LONG LEASEHOLDERS OF A BLOCK OF FLATS ALSO COLLECTIVELY

Resolved Question:

IF THE LONG LEASEHOLDERS OF A BLOCK OF FLATS ALSO COLLECTIVELY OWN THE FREEHOLD HOW APPLICABLE ARE THE SECTION 20 CONSULTATION PROVISIONS
Submitted: 2 years ago.
Category: Property Law
Expert:  Joshua replied 2 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

Do they own through a limited company please or as joint legal owners?

Customer:

management company limited by guarantee and ALL leaseholders are members

Joshua :

Thank you.

Joshua :

If the management company owns the freehold, with the leaseholders all having an interest in the management company, then the company is still obligated to comply with the requirements of the LaTA legislation with regard to consultation.

Joshua :

If all of the leaseholders are willing to waive their rights in this respect each leaseholder could write to the company confirming they are very satisfied with the proposed works and that they do not require s20 notices and are prepared to waive their right in this respect and confirm that they be responsible for the contribution demanded.

Joshua :

The company may in addition wish to ask the leaseholders for money up front in addition to the above letter of comfort.

Joshua :

If any one or more leaseholders refuses to provide the above, then they are within their rights to refuse to may more than £250 to any major works proposed to the company just as would be the case for a third party freeholder. This would leave the members having to make up the shortfall between them which would of course include any individual leaseholder that refused to pay albeit potentially saving them a lot of money if their share is to be made up by the members jointly.

Joshua :

Best practice is to comply with the notice procedure but the above is an alternative if preferred.

Joshua :

Is there anything above I can clarify for you any further?

Customer:

but if at agm of management company the works have been unanimously agreed, surely a leaseholder cannot then say wearing a different hat as tenant rather than landlords hat as at the agm that he objects to the works approved. What do you think. Surely LVT would not hear an application on the basis that the lessee had agreed, albeit as member of the landlord management company

Joshua :

In deed he can. The reference to hats is spot on in that the purpose of an AGM is for the members of the company to make a decision about the company itself. Just because a member happens also to be a leasehold (which is necessarily the case here) has no impact in law. The law treats the leaseholders with just as many personal rights as they would have if a third party freeholder was in charge and a decision a member leaseholder makes at a company meeting has no effect on the right of that leaseholder to subsequently assert his rights fully personally against the company under legislation. For this reason shared freehold companies need to be very careful in ensuring it goes through the same steps as any other freeholder. However if all freeholders are agreed, the alternative approach could be considered.

Joshua :

The question of hats is very useful to always bear in mind when dealing with dual roles, and remembering that a decision in one capacity has little or no effect on the individual concerned in his other capacity

Joshua :

Is there anything else I can help you with?

Joshua, Lawyer
Category: Property Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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